The mortgage industry will face its share of challenges, opportunities and unknowns in 2025. Here are a few trends on the horizon: Perhaps the biggest unknown for mortgage underwriters and processors is the effect of a second Donald Trump administration on the industry. The Biden administration’s priority in the housing sector was making housing more affordable and accessible. Vice President Harris and Trump both indicated a desire to make housing more affordable using different approaches.
An analysis by the Congressional Budget Office (CBO) has concluded that Fannie Mae and Freddie Mac are in better financial position to repay the U.S. Treasury for its stake in the enterprises than they were four years ago. CBO conducted updated analysis on the effects of recapitalizing the GSEs at the request of the House Financial Services Committee. The original analysis was conducted in August 2020, while the CBO released its updated findings last week.
Mortgage underwriters and processors can offer larger FHA mortgage loans and loans that conform to FHFA limits next year. Both agencies announced higher loan limits last week. The Federal Housing Finance Agency (FHFA) announced that conforming loan limit values (CLLs) for mortgages acquired by Fannie Mae and Freddie Mac will be $806,500 for one-unit properties in most of the United States in 2025.
Fannie Mae and Freddie Mac produced profitable third quarter financial results consistent with recent trends. The government-sponsored enterprises released third-quarter results last week, with Fannie Mae reporting a $4 billion quarterly profit and Freddie Mac reporting $3.1 billion in net income.
Home sales are on the decline despite lower mortgage rates and increasing supply, with the latest projections indicating a 30-year low for this year. Real estate brokerage Redfin reported that existing home sales fell 3.1 percent year over year in August to their lowest mark since May 2020, when the pandemic brought the housing market to a standstill. Removing that month, August sales were the lowest since 2012.
The Consumer Financial Protection Bureau (CFPB) issued an advisory opinion that some mortgage-rate comparison websites may be operating in violation of federal mortgage lending laws. At issue is whether these rate comparison websites and mobile apps violate Section 8 of the Real Estate Settlement Procedures Act (RESPA). CFPB contends that some companies may be in violation when they steer potential borrowers to lenders using “pay-to-play” tactics rather than providing objective information.
Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.
Little has changed from previous economic and housing forecasts one month into the new year. Fannie Mae released its first economic commentary of 2023 earlier this month. It led off by maintaining its forecast of a modest recession beginning in the first half of the year, despite signs of economic strength at the of last year.
Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.
Homebuyer sentiment for 2023 mostly matches industry projections for this year’s housing and mortgage markets, according to recent surveys and forecasts. Fannie Mae released its latest monthly Home Purchase Sentiment Index last week. It showed that while sentiment is improving, it remains well below pre-pandemic levels.
Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.
Mortgage rates soared in 2022 and home prices only recently began to moderate. It got more and more difficult for potential homebuyers to afford a new mortgage throughout the year. That made it more challenging for mortgage processors and underwriters to serve those interested in financing a home purchase.
Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.
The Federal Housing Finance Agency (FHFA) issued a final rule last week establishing multifamily housing goals for Fannie Mae and Freddie Mac over the next two years. Multifamily housing goals for 2023 and 2024 will be based on a new percentage-based methodology rather than an absolute number. The change to a percentage was part of a proposed rule change issued in August.
Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.
Fannie Mae’s Economic and Strategic Research Group (ESR) took its first crack at forecasting 2024, predicting a recovery in housing and the general economy after what most expect to be a bumpy year in 2023. In its November commentary, the ESR projects negative economic movement in the fourth quarter of this year, followed by a modest recession to begin in the first quarter of 2023.
Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.
A pair of key demographics are concerned about their ability to navigate the home-buying process, according to a pair of recent Freddie Mac surveys. Freddie released the results of separate surveys of “Generation Z” and military veterans. Both surveys showed many people in these groups worry about their ability to buy a home in the future.
Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.
The mortgage boom of the last few years, fueled largely by historically low interest rates, ended earlier this year. The sub 3-percent loan has been replaced with a 7-percent, 30-year fixed. Refinance activity has dried up as a result.
Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.
Assistance may be on the way to mortgage underwriters and processors to help offer mortgages to more potential borrowers. Last week, several products and proposed rules were announced that were specifically target to low-income and moderate-income homebuyers. Freddie Mac released a pair of enhancements.
Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.
As rising mortgage rates stifle the mortgage market, a pair of regulatory agencies are pitching ideas to spur growth in underserved markets. The Consumer Financial Protection Bureau (CFBP) has invited the public to present ideas for new mortgage products. Specifically, the bureau wants ideas for improving mortgage refinances for homeowners who have smaller loan balances.
Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.
Written By: Stacey Sprain
As an FHA originator, processor or underwriter, it’s likely that in the ongoing foreclosure market you’ll run across a HUD REO loan at some point. The purpose of this multi-part article is to provide you with some useful information to help in your endeavors.